Real estate industry calls for stamp duty to be slashed during the coronavirus period

Real estate agents across the country are lobbying state governments to slash stamp duty for the next six months of the coronavirus crisis in order to keep the property market firing.

With so many homes now being withdrawn from auction, and fewer being put on the market for sale, the agents hope that a cut in stamp duty could entice more potential buyers and sellers to return.

“That would make such a big difference,” said Leanne Pilkington, the president of the Real Estate Institute of NSW. “Maybe the [COVID-19] virus is the disruptor, in that regard, that we’ve been waiting for.”

Damian Collins, the president of the Real Estate Industry of Western Australia, said it could be the boost needed for the market at this time. “Transactions are dropping off, and we’re starting to see that,” he told a real estate Elite Agent webinar on Wednesday, April 1.

“So we’ve been lobbying for stamp duty relief for a period because some people are in the position where they have to sell. We’ve been lobbying for a significant cut in stamp duty for six months to help the industry keep moving along.”

Agents are also pressing the federal government for more clarity on its moratorium on evictions for six months for those unable to pay rent. In Victoria, for instance, the Victorian Civil and Administrative Tribunal (VCAT) is still issuing possession orders in the case of non-paying tenants. In NSW, the equivalent tribunal NCAT isn’t.

“You have a prime ministerial announcement and everyone melts down but we don’t know what the processes are going to be,” said Leah Calnan, the president of the Real Estate Institute of Victoria. “But that language around no more evictions for six months isn’t right for Victoria. VCAT is still issuing possession orders.”

Across the border, in NSW, however, it’s a different story. “NCAT isn’t doing evictions for delayed rent,” said Ms Pilkington. “They will if there’s a public health risk, or a tenant causing significant damage to a property, but not for rent.

“But we are certainly asking for clarification. A lot of landlords are being affected by this and not all are in a position to help. A lot are self-funded retirees and the rent is their money to live on, too.

“There does need to be a change in the government’s language so people are clear they’re not saying tenants can have six months with no rent.”

The best scenario tenants in trouble can hope for, believes Mr Collins, is being able to pay less rent, but they’ll still have to pay some. “A 100 per cent rent relief isn’t realistic,” he said. “I would want to say at least 75 per cent would be ideal, with the state governments administering the money from federal government, and paying the agent direct.”

Property managers are keenly aware that landlords will be suffering in the crisis too, with many protesting that they can’t claim on their landlords’ insurance when a tenant doesn’t pay or to make up the shortfall.

Most policies demand that an eviction notice is issued as part of the process to demonstrate that the landlords are trying to mitigate their losses and, with rental evictions banned, most say they can end up hugely out of pocket.

In NSW, property managers are still waiting for advice on that from Fair Trading, while in Victoria and Western Australia, Ms Calnan and Mr Collins say landlords can still apply for an eviction notice, but there’s been a directive that it will not be honoured by VCAT or the magistrates’ courts.

There’s also confusion about which state’s rules and stimulus packages apply to property owners when they might live in one state, but own a property in another. There’ve been a number of past cases where VCAT or NCAT directives can’t be followed through as the courts have ruled they can’t cross borders.

“Governments are well aware of this situation,” said Ms Calnan. “But they haven’t yet acted. [Provisions] should apply to where a property is, rather than where a landlord resides.”